An Enfield PFI extension being built onto Lea Valley High School for the creation of extra school places Photograph: David Levene

Until the government lifts the lid on private finance initiative (PFI) contracts in the public sector, billions of pounds in potential savings will continue to be lost to the taxpaying public. The great unexplored area of public expenditure is the annual revenue consequences of servicing the long-term PFI debts, all a consequence of investment in new hospitals, courts, schools, roads, IT and water and waste infrastructure.

Earlier this year, the National Audit Office identified PFI as a major source of revenue pressure for hospital trust budgets in England. Annual PFI charges pre-empt between 0.4% and 18.6% of annual hospital trust income, but PFI contractors are insulated from public sector cutbacks and efficiency targets. Public authorities faced with major budget cuts and real-terms decrease in fundings are also lumbered with the increased cost of servicing ballooning PFI debt, payments for which are index linked so that they increase in cash terms each year (this is achieved by linking repayment to the retail prices index or some such measure of inflation).

The government's reluctance to disclose the details of these financial arrangements (revealed once again in the report recently published by openDemocracy) denies the public an opportunity to evaluate the fairness with which cuts are being implemented, and the extent to which PFI investors are being shielded. The official opposition which originally implemented the policy, are unlikely to press for transparency because for years they exploited this secrecy to avoid criticism of high private sector profits.

As local authorities and health service managers begin to pare their services back to the bone, they should press to open up the PFI contracts. Norfolk and Norwich PFI hospital contract, described as "the unacceptable face of capitalism" by Edward Leigh, the chairman of the House of Commons public accounts committee, generated for shareholders a rate of profit of 60.4% within three years of the hospital opening, according to the NAO.

Such rewards might not have been possible had PFI contracts been open to public scrutiny in the first place. But in England, Freedom of Information Act requests have been rejected on the grounds that commercial contract details can be withheld. Apparently protecting investors rights trumps the public interest.

In Scotland, however, a number of PFI contracts have become available – partly because the Scottish information commissioner ordered the release of some contracts. The result, as Scottish researchers Jim and Margaret Cuthbert demonstrate, is to show how the present value of the stream of payments, which the public sector contracts to pay for the capital element of the project, can be much greater than the actual capital cost of the asset. In the case of the Edinburgh Royal Infirmary PFI, for example, the present value of what the public sector pays is more than twice the £189m original cost of construction. In the Hairmyres hospital PFI in Lanarkshire, what the public pays is 1,97 times the original construction cost of £73m. In some cases, PFI could almost be described as a "one hospital for the price of two" policy. To put it plainly, PFI charges include too high a rate of interest and grotesquely high returns on equity.

In 2000, the Treasury commissioned a report from Lord Sharman on accountability for public money amid concerns that there was a lack of scrutiny when taxpayer funds were channelled to private companies. The report effectively advocated open-book accounting – ie that public funds, even when channelled to private firms, through outsourcing and commercial contracts should be scrutinised. It concluded that "the proper and productive use of public money is an indispensable element of any modern, well-managed and fully accountable democratic state".

But politicians currently presiding over staff cuts, pension reductions and public service closures have no interest in the public or the taxpayer, it seems. Having used the taxpayer to bail out profligate banks to the tune of several hundred billion pounds in 2008, the government is now paying off the deficit using budgets intended for public services. But in a triple whammy we have the spectre of the government using the exorbitant interest charges for PFI debt finance as a means of restoring the balance sheets of the banks and perpetuating bankers' bonuses. In many cases these are the very banks we own. What justification, then, these same banks using commercial confidentiality to shelter behind, and what justification can the government want for not opening up the contracts? Our entitlements should not be squandered for want of scrutiny, and for want of not taking the trouble to care.